Industry intervention for energy market reforms

Of Thanks to Floudopoulos

The conditions prevailing in the Greek electricity market do not allow suppliers and large consumers of electricity to hedge the risk of a sharp rise in prices, unlike what happens in other markets in Europe.

This is pointed out, among others, by the Association of Industrial Energy Consumers (EVIKEN), which represents the major energy-consuming industries in the country, in a letter sent to the Energy Regulatory Authority. EVIKEN claims that in the Greek market there are reasons of limited competition for RAE to intervene regulatively.

EVIKEN also refers to previous letters to RAE, in which it had pointed out that specific strategies are taking place in the supply market, which lead to the transfer of 100% of the risk of the wholesale market prices to the tariffs of the final consumers.

This fact in combination with the non-existent futures market and the reluctance of producers, including PPC, in the absence of basic competition, to offer a minimum percentage of their production portfolio through bilateral contracts results, according to EVIKEN, in all the energy produced. to pass through the energy exchange, the prices of which are now formed without risk by the producers.

In the same letters, EVIKEN talks about possible conditions for price manipulation in the wholesale market, as the producers now become indifferent to the prices that they themselves shape in the wholesale market.

EVIKEN claims that the prices formed in the wholesale market do not correspond to the average import price of natural gas according to the data published by RAE, regarding the offers of CCGTs, taking into account that the supply contracts in our country are based on the stock prices of the previous month.

According to EVIKEN, the results of this strategy are also evident in the prices formed in the wholesale market in October-December 2021, but mainly in the prices formed last March 2022 at the level of 272.4 euros / Μwh, while the average import price φ .a in the month of February was 75.5 euros / MWH.

According to the letter, despite the significant drop in prices in European wholesale markets in April, prices in the Greek market continue to fluctuate at high levels of 250 euros / MWh despite the very high level of imports, increased RES production and reduced seasonal demand.

Concluding, EVIKEN emphasizes that there are exceptional conditions in the operation of the electricity market, which require regulatory measures, especially given that in the Greek market there are reforms that are significantly delayed such as: the implementation of redistribution in the balancing market, the acquisition of full responsibility for balancing RES, the conclusion of bilateral contracts with producers of thermal units and finally the substantial participation of demand in all markets.